Icelandair shifts volcano-hit hub operation back to Reykjavik

Icelandair is relocating its hub operation back to Reykjavik today having decamped to the Scottish city of Glasgow after its base was closed by volcanic activity.

The volcanic ash from southwest Iceland which disrupted European airspace for several days led to the closure of Reykjavik's Keflavik Airport at about the time, last week, when airspace on the continent was re-opening.

Icelandair chief executive Birkir Holm Gudnason tells ATI that the airline received notification on 22 April that Keflavik was likely to close.

"It took us 12 hours to move the network," he says. "The whole network is in Glasgow."

Icelandair set up a feeder shuttle operation from the northern Icelandic city of Akureyri, some 280km from Reykjavik, and arranged to transport passengers between the two locations by bus.

The airline's hub operation involves aircraft departing in the morning for European destinations and serving transatlantic routes in the afternoon.

Gudnason says that the airline relocated nine or 10 aircraft in total to Glasgow, from where it operated non-stop to North America. He estimates that, despite the five-day hub shift, the airline managed to keep 75-80% of its services running.

While the disruption has cost Icelandair some $300,000-400,000 per day, in terms of lost revenues and extra expenses, Gudnason says it has incurred a relatively modest $100,000 additional daily cost by moving to Glasgow. The airline is aiming to move back to Keflavik today and restore a full normal service.

Icelandair is not intending to pursue direct compensation from the hard-hit Icelandic Government. But Gudnason says it will ask the Government to invest in a tourism campaign to "build up the image of Iceland" following the recent negative publicity.

While it is rare for an airline to relocate its hub to another country during a period of crisis, Lebanon's Middle East Airlines temporarily transferred its operation from Beirut to the Syrian capital, Damascus, in July 2006 after Israeli forces bombed its home airport.